Cashflow using indirect method

[sowrudy]

Hi All,

I am trying to make sense of cashflow statement using indirect method. The main challenge is on the "adjustment for non cash item".

I understand that some of the items include depreciation, revaluation gain, income tax, etc. And I can easily solve all the exam questions on paper.

But in practice, when I look at the consolidated statement of a public company, the adjustment can include hundreds of items (beyond depreciation and tax expense). My question is, in practice I wonder if there are any tips or easy way to determine what to adjust, or we have to go through all the P&L items and see which ones are actually affecting BS one by one?

[Marek Muc]

There's no shortcut and setting up a cash flow statement from scratch is not an easy task as you need to figure out how to identify these adjustments. During your exams there shouldn't be too many of them so practice a bit with and you should be fine